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Wednesday, 15 November 2017

Public-sector pay rise should be guaranteed, says IPPR

The government should guarantee public sector pay rises to ease the wages squeeze on vital public services employees, the IPPR has said.

Public sector pay should either rise in line with inflation or private sector pay, the centre-left think tank added.

The GMB union backed the call, saying the policy would encourage public sector staff retention.

The Treasury said the public sector pay cap was scrapped in September, and pay was being reviewed.

Alfie Stirling, IPPR senior economic analyst, said: "It is vital that the public sector does not get left behind.

"Public goods, such as health, education and law and order, are the foundations upon which successful private commerce is built."

The cost of raising public sector pay in line with Consumer Prices Index inflation over the next two years would be £5.8bn, with the cost dropping to £3.55bn after taxes and lower welfare payments, according to the IPPR analysis.

Higher spending in the economy would reduce the figure further - to £3.3bn by the end of the 2019/20 financial year, said the report.

To bump public sector pay in line with the private sector would cost about £8bn, or about £5bn after tax receipts, Mr Stirling said.

The value of public sector pay has been "significantly eroded" by a seven-year pay squeeze, IPPR added.